Consider the Following Hypothetical Scenarios: Scenario A: You Are About

question 27

Multiple Choice

Consider the following hypothetical scenarios: Scenario A: You are about to purchase a pair of 7 for All Mankind jeans for $175 and a t-shirt for $45.The sales attendant at the store tells you that the pair of jeans you wish to buy is on sale for $160 at another store,located about a 20-minute drive away.
Scenario B: You are about to purchase a pair of 7 for All Mankind jeans for $175 and a t-shirt for $45.The sales attendant at the store tells you that the t-shirt you wish to buy is on sale for $30 at another store,located about a 20-minute drive away.
Based on standard economic theory,under which scenario would you make the 20-minute trip to the other store?

• A) Scenario B because a $15 saving amounts to a substantial discount (about 33 per cent).
• B) In either scenario if I think a $15 saving is worth the 20-minute trip.
• C) In none of these scenarios if I think the $15 saving is not worth the 20-minute trip.
• D) B and C are correct answers.

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Definitions:

Coupons

Vouchers offering a discount on the purchase price of certain products or services, serving as a marketing strategy to increase sales or customer loyalty.

Waiting In Line

The process of queuing or standing in line as a form of allocating goods or services when demand exceeds supply.

Per-apple Tax

A hypothetical or specific form of taxation where a tax is levied on each unit of apple sold or consumed.

Imported Apples

Apples that are brought into a country from another country for sale, which can affect the local market in terms of prices, supply, and demand.